investment holding group (q.p.s.c)...investor presentation period ended 30 september 2019. content 1...
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Investment Holding Group Q.P.S.CInvestor Presentation
Period ended 30 September 2019
Content
Introduction1
Operating Environment2
Business Review3
Financial Overview4
Appendix5
Financial Position(QAR 000)
2018 Q3 2019
Total Assets 1,370,093 1,384,738
Total Liabilities 596,594 584,790
Shareholders’ Equity 748,733 777,143
Financial Snapshot
Financial Snapshot
Operating Results(QAR 000)
Q3 2018 Q3 2019
Contracting 34,125 39,871
Trading 42,922 7,760
Water treatment and related maintenance 7,414 426
Others 17,676 14,264
Operating Segment Results
Profitability(QAR 000)
Q3 2018 Q3 2019
Total Revenue 324,217 323,029
Gros Profit 83,580 73,476
Gross Profit margin 26% 23%
Net Profit for the Period 45,141 34,534
Net Profit Attributable for Equity Holders of IHG 31,575 34,535
Earning Per Share 0.038 0.042
• Investment Holding Group W.L.L. (IHG) was registered as a limited liability company in 2008 to consolidate the investments of the group that were made in various companies since 1975. The legal status of the group was converted to a Qatari public shareholding company effective 11th May 2017.
• IHG is registered in the State of Qatar under CR. No. 39127.
• IHG is one of the Qatar’s leading companies with diversified businessactivities, that operates at different levels such as construction andcontracting, specialized contracting (mechanical, electrical andplumbing), supply of building materials, safety equipment, woodenproducts, fire fighting systems, and other related materials, inaddition to food, chemical and consumable supplies
• The Group has maintained a consistent rate of growth in profits andinvestment returns.
Introduction
Content
Introduction1
Operating Environment2
Business Review3
Financial Overview4
Appendix5
Mission
Strategies
Vision
❖ Activate management on the portfolio companies, to guarantee work continuity and optimize profit. In fulfilling this strategy, IHGmanagement will regularly review the strategic plans developed by subsidiaries’ management to ensure being responsive to the changingbusiness environment in which the Group and its subsidiaries operate.
❖ Diversify the Group’s investments portfolio in an aim to diversify its income, minimize risk, boost bottom line and improve the Group’s cashflow. In our diversification, we are targeting companies in defensive industries with high profit margins and low risk levels.
❖ Deleverage the Group’s balance sheet to reduce interest payments, resulting in an increase in the cash flow. This will enable the Group toreinvest in new opportunities and guarantee a sustainable growth.
❖ Bolster the Group’s relationship with existing clients by addressing their demands and maintaining the highest quality standards at thesame time.
❖ Establish and leverage on strategic partnerships and joint ventures with industry leaders in order to increase success rate in obtaining newproject work and strengthen the Group’s brand and reputation.
❖ Sustain revenue growth and profitability through project selection by focusing on markets where the Group can capitalize on its expertiseand track record and through targeting specialized projects with high profit margins.
❖ Secure the Group’s financial position by establishing and maintaining strong relationships with banks in Qatar, to ensure self-sufficiency forexisting capital needs and maintaining healthy levels of liquidity. Additionally, we are actively targeting the areas for reducing operationalcosts and increasing efficiencies of our portfolio companies, while complying with the highest standards of quality and safety.
❖ Foster a working environment that promotes professional growth through provision of training and development to employees in order toattract, develop and retain the best available personnel for positions of substantial responsibility.
To contribute to the development of the localeconomy, deliver steady and sustainablereturns for our shareholders while it diversifiesits investments in a variety of sectors, includingconstruction, manufacturing, engineering,education, healthcare, trading, hospitality andreal estate.
To invest to grow organically and inorganicallyin order to be recognized as a market leader ineach sector in which it invests in, by achievingsustainable growth and maintaining highquality performance building on its corevalues, people and expertise.
Our Vision, Mission and strategies
Board committees
Name Designation
1 HE Ghanim Sultan Al-Hodaifi Al-Kuwari Chairman
2 Khalid Ghanim S Al-Hodaifi Al-Kuwari Vice Chairman
3 Sheikh Nasser bin Ali bin Saud Al Thani Board Member(Independent, Non-Executive)
4 Hamad Abdulla Shareef Al Emadi Board Member(Independent, Non-Executive)
5 Omer Abdulaziz Al-Marwani Board Member (Independent, Non-Executive)
6 Abdul-Rahman Ghanim S Al-Hodaifi Al-Kuwari Board Member(Non-Independent, Non-Executive)
7 Mohammed Ghanim S Al-Hodaifi Al-Kuwari Board Member(Non-Independent, Executive)
8 Sultan Ghanim S Al-Hodaifi Al-Kuwari Board Member(Non-Independent, Non-Executive
9 Hamad Ghanim S Al-Hodaifi Al-Kuwari Board Member(Non-Independent, Non-Executive)
10 Abdul-Aziz Ghanim S Al-Hodaifi Al-Kuwari Board Member (Non-Independent, Non-Executive)
Group Board Nomination and Remuneration committee
Designation
Sheikh Nasser bin Ali bin Saud Al Thani Chairman of the Committee
Khalid Ghanim Sultan Al Hodaifi Al Kuwari Member
Hamad Abdulla Shareef Al Emadi Member
Hamad Ghanim Sultan Al Hodaifi Al Kuwari Member
Group Board Audit and Risk Management committee
Designation
Omar Abdul-Aziz Al-Marwani Chairman of the Committee
Sheikh Nasser Ali S Thani Al-Thani Member
Walid Ahmed Al Saadi Member – Board Advisor
Name Designation
Samer Wahbeh Group Chief Executive Officer
Mohamed Ghanim Al Kuwari Deputy CEO
Mohamed Abdulla Group Financial Controller
Joseph Akiki Group Legal Advisor
Mohamad RizkGroup Head of HR and Administration
Asmaa Belal Investor Relations Officer
Board of Directors
Executive Management
Board of Directors and Executive Management
Content
Introduction1
Operating environment2
Business review3
Financial overview4
Appendix5
Diversified portfolio
Leadership position in the Qatari market
Strengths
Synergistic benefits with entities often
pitching together successfully for
business
Intercompany trades to reduce
financial costs
Experienced Board members
and management
team
Balanced revenue stream
The Group aims to benefit from the economic growth in thecountry, especially in non-oil sectors, including healthcare,education and transportation, along with those related to thehosting of World Cup in 2022.
Exploring opportunities arising by the economic diversification inthe local market, as part of the Qatar National Vision 2030
The Group capitalize on the country’s positive sentiment in termsof new business and investment opportunities emerging fromthe country’s objective for self-sufficiency in food production andmanufacturing.
Opportunities
Strengths and opportunities
Investment Holding Group Q.P.S.C
General contracting
Construction Development Contracting & Trading W.L.L.
51%
Specialized contracting
Consolidated Engineering Systems Company W.L.L.
100%
Electro Mechanical Engineering Company W.L.L.
68.5%
Watermaster (Qatar) W.L.L.
63.3%
Debbas Enterprise – Qatar W.L.L.
51%
Suppliers and Traders
Trelco Limited Company W.L.L.
100%
Consolidated Supplies Company W.L.L.
100%
Trelco Building Materials Company W.L.L.
85 %
Portfolio companies
• Established in 2006• Specialized in fire fighting and low current systems
associated with commercial and residential complexes,industrial plants and military establishments. Alsospecializes in lighting and electrical installation material fordifferent applications
• Certificates awarded ; ISO 9001:2015, ISO 14001:2015 and18001:2007.
Consolidated EngineeringSystems Company W.L.L.
Consolidated Supplies Company W.L.L.
Trelco Limited Company W.L.L..
Watermaster Qatar Company W.L.L.
• Established in 2002, CSC is a multidivisional company which isspecialized in fire extinguishers refilling and servicing, supplyand maintenance of electrical, lighting, sanitary-ware andpersonal protective equipment.
• CSC supplies other building materials such as safety equipment,power tools, hand tools, plumbing materials, lighting fixtures,binding wires and other accessories, which are commonly usedin construction projects.
• Established multiple divisions with international brand namesincluding Waiss and Hammer Man being distinguished productsfor sanitary ware and personal protective equipmentrespectively, which are exclusive trademarks for CSC.
• Established in 2006• A leading specialized contracting company in the wellness
industry, specializing in water-related projects encompassingWater Features, water/ waste water treatment, wellness &pools and musical fountains.
• Provides design of the treatment plants, sub water networksas well as supply, installation, commissioning andmaintenance of the treatment plants.
• Completed around 170 projects in Qatar.• Certificates awarded ; ISO 9001:2015, ISO 14001:2015 and
18001:2007.
Portfolio companies
• Established in 1977.• A supply and trading company serving diverse market sectors
including information technology and communications,security, engineering, construction, transport, materials,services, energy and consumer products.
• TLC specializes in the trading of industrial materials &chemicals, oil & gas, water treatment, agricultural & healthchemicals.
• One of the major suppliers of imported foods and beverages,beauty cosmetics and other consumer goods in Qatar
• Shares of Trelco Limited were transferred to IHG in 2008
• Established in early 2005• A civil contracting company which provides a full range of
construction services.• Executed many projects including turnkey projects, design &
build, maintenance & renovation and value engineering.• More than 70 completed distinguished projects• The Company established structural, MEP and architectural
divisions, qualifying it to execute most of the constructionworks in house.
• ISO Certificates awarded ; ISO 9001: 2008 and ISO 14001: 2004
Construction DevelopmentContracting & Trading Co.W.L.L.
Debbas Enterprises -Qatar W.L.L
Electro MechanicalEngineering Co W.L.L(EMEC)
Trelco Building MaterialsCompany W.L.L. (TBMC)
• Established in 2005.• A premier provider of construction and contracting services in
Qatar.• Provides various mechanical, electrical and contracting
activities. Its areas of specialty include installation andmaintenance of HVAC, plumbing, drainage and water supplysystems. It also specializes in supply, installation andmaintenance of high voltage and low voltage equipment, inaddition to low current, security and building managementsystems.
• Certificates awarded ; ISO 9001:2015, ISO 14001:2015 andISO:45001:2018.
• Established in 2006, in partnership with Debbas Holding –Lebanon.
• An electro mechanical contracting company.• Specialized in the electromechanical projects and services such
as mechanical, electrical, plumbing, low voltage works, datacenter infrastructure in addition to street lighting installations.
• Structured to tackle the entire process from design support,planning and comprehensive engineering to completeexecution and integrated facility management services
• Certificates awarded ; ISO 9001:2015, ISO 14001:2015 andOHSAS 18001:2007.
• Established in 2008.• One of the leading providers of building materials, including
(but not limited to), prop pipe supports, scaffolding, softwood species, hard wood species, engineering panels andwood-based panels engineering products.
• Offers wide range of wooden products to its clients, mainlythe civil contracting companies, joinery and wood worksfactories, governmental projects, factories, and individuals.
• Certificates awarded ; ISO: 9001:2015.
Portfolio companies
Content
Introduction1
Operating environment2
Business review3
Financial overview4
Appendix5
Financial Highlights – Profitability
Summary
• Continues profitability ; Gross profit reported QAR 73.5 Mn and net profit reported QAR 34.53 Mn in Q3 2019
• Maximizing the Stakeholders’ Return ; Profit attributable to shareholders’ of the company reached 34.5 Mn with a growth of 9.4% in Q3 2019
26%
23%
14%
11%
0% 5% 10% 15% 20% 25% 30%
Q3 -2018
Q3 -2019
Gross Profit Margin Vs. Net Profit Margin
NP Margin GP Margin
45.14
34.53 31.58 34.54
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
Q3 -2018 Q3 -2019
QA
R M
illio
n
Maximizing Shareholders' Profit
Net Profit Shareholders' Profit
83.6
73.5
45.14
34.53
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Q3 -2018 Q3 -2019Q
AR
Mill
ion
Gross Profit & Net Profit
Gross Profit Net Profit
34%
42%
7%
17%
64%12%
1%
23%
Profit By Operating Segment
Contracting
Trading
Water treatment &relatedmaintenance
Others
Q3 2018
Q3 2019
Financial Highlights – Revenue, Expense and Operating Cash Flow
10%
64%
24%
2%
11%
64%
23%
2%
Revenue Composition
Maintenance
Contracting
Trading
FacilityManagement
Q3 2018Q3 2019
39.5 41.7
284.7 281.3
-
50.0
100.0
150.0
200.0
250.0
300.0
Q3 2018 Q3 2019
QA
R M
illio
n
Recurring and Non Recurring Revenue
Recurring revenue Non recurring revenue
42,757
(17,523)
9,706
(14,344)
(30,000)
(20,000)
(10,000)
-
10,000
20,000
30,000
40,000
50,000
2018 Q3 2019
QA
R 0
00
Cash and Cash equivalent Vs. Operating Cash flows
Net cash flows from operating activities
Net cash and cash equivalent
-
5,000
10,000
15,000
20,000
25,000
30,000
QA
R 0
00
General and Administration Expenses
2018 2019
50%
29%
21%
65%
23%
12%
Revenue by Operating Segment
Contracting
Trading
Water treatment& relatedmaintenance
Q3 2018Q3 2019
37%
15%0%
26%
22%25%
8%
3%
26%
38%
Other Income Composition
Rentalincome
Serviceincome
Gains/(losses) from saleof PPE
Dividendincome
Others Q3 2018Q3 2019
Maximizing Shareholders’ Return
Summary
• Earning Per Share (EPS) reached QAR 0.042 with a growth of 9.4% in Q3 2019.
• Stable Dividend Per Share (DPS) at QAR 0.25 in Q 2019
• Return on Equity (ROE) reached QAR 0.044 with a growth of 19.4% in 2019
• Return on Assets (ROA) reached 0.025 with a growth of 9% in Q3 2019
0.038
0.042
- 0.010 0.020 0.030 0.040 0.050
Q3 -2018
Q3 -2019
QAR
Higher Earning Per Share
EPS
0.25
0.25
- 0.10 0.20 0.30
Q3 -2018
Q3 -2019
QAR
Dividend Per Share
DPS
0.036
0.044
- 0.010 0.020 0.030 0.040 0.050
Q3 -2018
Q3 -2019
QAR
Higher Return on Equity
ROE
0.023
0.025
- 0.010 0.020 0.030
Q3 -2018
Q3 -2019
QAR
Higher Return on Assets
ROA
Financial Highlights – Financial Position
Summary
• Assets Growth; Total assets reached QAR 1.38 Bn with a growth of 1% in Q3 2019.
• Healthy Liquidity : Secure the Group’s financial position by maintaining healthy levels of liquidity
1,370 1,385
1,000
1,100
1,200
1,300
1,400
1,500
1,600
2018 Q3 2019
QA
R M
illio
n
Total Assets
Assets Growth
6%
36%13%
10%
35%
6%
37%
14%
9%
34%
Assets by Segment*Contracting
SpecializedContracting
Trading
Watertreatment &relatedmaintenance
* Excluding Goodwill Q3 20192018
6%
15%
15%
6%2%2%
52%
3%
4%
16%
16%
4%2%
3%
51%
4%
Healthy Liquidity ; Assets by Composition
Cash and Bank
AccountsReceivables
WIP
Inventories
OtherFinancialAssets PPE & IP
Goodwill
Q3 2019
2018
1.16
1.17
1.00
1.05
0.90 1.00 1.10 1.20
2018
Q3 2019
Healthy Liquidity
Quick Ratio Current Ratio
Financial Highlights – Capital Structure
31.58 34.53
62.38
76.17
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
Q3 2018/Q4 2018 Q3 2019
QA
R M
illio
n
Continues Growth in Retained Earnings
Profit for Shareholders Retained Earnings
1,370 1,385
773 800
597 585
-
200
400
600
800
1,000
1,200
1,400
1,600
2018 Q3 2019
QA
R M
illio
n
Assets, Equity and Liabilities
Assets Equity Other Liabilities
45%
25%
20%
10%
45%
26%
19%
10%
Stable Capital Structure; by Composition
Assets
Equity
OtherLiabilities
TotalBorrowings*
Q3 2019
2018Q3 2019
* Total borrowing includes interest bearing loans and borrowings and bank overdrafts
Summary
• Continues growth in retained earning ; retained earning improved by 22% in Q3 2019.
• Stable Capital Structure; Total Equity reached QAR 800 Mn with a growth of 3% at a stable Capital Gearing in Q3 2019.
1.83
0.80
2.58
1.78
0.75
2.58
-
0.50
1.00
1.50
2.00
2.50
3.00
Equity Multiplier Debt to EquityRatio
Capital GearingRatio
Gearing Ratios
2018 Q3 2019
Content
Introduction1
Operating environment2
Business review3
Financial overview4
Appendix5
Consolidated Statement of Financial Position
(QAR 000)Audited
Dec 2018
Unaudited
Sep 2019
ASSETS
Current assets
Bank balances and cash79,952 48,672
Accounts receivable and other debit balances170,252 190,389
Gross amounts due from customers on contract work201,199 228,014
Due from related parties30,618 29,746
Inventories78,663 58,622
Total current assets 560,684 555,442
Non-current assets
Retentions receivable44,621 45,389
Financial assets at fair value through profit or loss31,000 31,000
Investment properties959 17,377
Goodwill711,492 711,492
Right-of-use assets - 4,848
Property and equipment21,338 19,189
Total non-current assets809,410 829,296
Total assets 1,370,093 1,384,738
(QAR 000)Audited
Dec 2018
Unaudited
Sep 2019
LIABILITIES AND EQUITY
Current liabilities
Bank overdrafts 70,247 63,016
Borrowings 141,972 164,323
Lease liabilities - 2,960
Due to related parties 61,064 49,948
Gross amounts due to customers on contract work 18,309 9,154
Dividend Payable 3,293 3,931
Accounts payable and accruals 186,839 181,782
Total current liabilities 481,723 475,115
Non-current liabilities
Borrowings 87,796 82,428
Lease liabilities - 2,067
Retentions payable 1,881 1,919
Provision for employees’ end of service benefits 25,193 23,260
Total non-current liabilities 114,870 109,674
Total liabilities 596,593 584,790
Equity
Share capital 830,000 830,000
Legal reserve 8,858 8,858
Other reserves (152,508) (152,508)
Revaluation reserves - 14,625
Retained earnings 62,383 76,169
Equity attributable to the shareholders of the Company 748,733 777,143
Non – controlling interests 24,767 22,805
Total equity 773,500 799,949
Total liabilities and equity 1,370,093 1,384,738
Consolidated Statement of Profit Or Loss and Other Comprehensive Income
(QAR 000)UnauditedSep 2018
UnauditedSep 2019
Revenue 324,217 323,029
Direct cost (240,637) (249,552)
Gross profit 83,580 73,476
Other income 14,694 14,596
Gains on financial assets at FVTPL 28,750 -
Fair value gain on investment properties 2,248
General and administrative expenses (73,850) (44,521)
Finance cost (8,034) (11,265)
Net Profit for the year 45,141 34,534
Net Profit for the year attributable to:
The shareholders’ of the Company 31,575 34,535
Non-controlling interest 13,565 (1)
Total 45,141 34,534
Other Comprehensive Income
Items that will not be reclassified to profit or loss in subsequent periods:
Revaluation surplus from transfer of property and equipment to investment property - 14,625
Total other comprehensive income for the period - 14,625
Total comprehensive income for the period 45,141 49,159
Attributable to:
Shareholders’ of the Company 31,575 49,160
Non-controlling interest 13,565 (1)
Total comprehensive income for the period 45,141 49,159
Thank you.Investor Relations department
+974 44681810
www.ihgqatar.com.com
IHGInvestment Holding
Group Q.P.S.C